Over the past few years there’s been sharp rise in the number of local councils that have chosen to introduce landlord licensing schemes throughout England and Wales. Often these schemes increase business costs for landlords and place unnecessary burdens on the majority of compliant landlords, without rooting out the bad. Below, Gavin Dick, the National Landlord Association’s (NLA) Local Authority Policy Officer, outlines why we’ve seen a rise in the number of new schemes and highlights a new interactive tool that will help landlords to keep on top of it all.
Local councils and general consent
Since 2010, local councils in England and Wales have been granted ‘general consent’ when introducing new licensing schemes for private rented housing. This removes the requirement for central government to ratify the scheme before it’s rolled out. Before then, all new schemes had to be verified and approved by central government.
The introduction of general consent in 2010 presented a huge risk for landlords and the wider community, as it still does. It allows councils to introduce a scheme without any checks and balances and means that the driving force behind a new scheme could be political, rather than an evidence based approach.
In fact, the law says that new licensing schemes can only be set up by councils in areas which have an anti-social behaviour problem, which can be directly linked to the poor property management of private rented housing in the area, or low demand. However, many councils often struggle to justify the need for new schemes, and present a flimsy or non-existent evidence base to ‘prove’ a direct correlation between particular issues and the PRS.
The NLA actively engages with local councils across England and Wales and works hard to resist or positively influence new schemes but we can’t always prevent councils from going ahead. The recent high profile judicial review of Enfield Borough Council’s (EBC) proposed new scheme is a good example. The judicial review refused the new scheme on the basis that EBC hadn’t fully consulted in neighbouring boroughs, not on whether EBC were within their rights to set it up. This particular example means that, in all likelihood, nothing could technically prevent EBC launching a new scheme, so long as they do a better job at consulting on any future proposal.
Either way, licensing presents a great concern for landlords as it’s led to a disjointed framework across England and Wales and a system that’s confusing and costly for them and their tenants.
A new licensing tool for landlords
It’s important to be aware of local licensing laws as they can present a significant upfront business cost and can be even costlier if you unwittingly fail to comply. That’s why we’ve decided to create a new interactive tool to help landlords keep on top of the situation and give them the licensing lowdown in their specific region. The new tool/map provides you with:
- An outline all of the existing landlord licensing schemes in England and Wales
- Details about the fees payable for any mandatory, additional or selective schemes in your region
- Information about where proposals for new schemes are currently under consideration
- A list of the NLA’s local representatives who are active in your area and pivotal in engaging with local councils
The NLA is both the largest landlord association in the UK and the only association with a regional network of dedicated representatives that act on behalf of local landlords.
Are you aware of all the risks involved in letting property?
This is just the latest part of our campaign: Rent, Risk, Resolve, which looks to help landlords to mitigate against some of the major risks involved with letting property. During the campaign we’ve already focussed on the risk and potential impact of rent arrears and rising interest rates to the success of your lettings business. Now we’re looking at the risks and associated costs of complying with unnecessary local licensing schemes.
The final part of our campaign, which launches later this month, will look at probably the most damaging risk to the PRS of them all: rent controls. It will explore the likelihood and potential impact of rent controls being introduced and what you can do to lobby your local MP about the issue. So make sure to keep any eye on the NLA’s website and blog for more in formation in the near future.
In the meantime, check out our interactive map and make sure you’ve got the licensing lowdown in your area: www.landlords.org.uk/rentriskresolve/licensing-in-your-area